Bong

Quarterly Report • May 18, 2010

Interim report January – March 2010

Interim report, January – March 2010

"At fi xed exchange rates, we recorded growth of 2.5% compared to the fi rst quarter of 2009," says Bong's President and CEO Anders Davidsson. "Tyvek® sales have got off to a good start in all markets and order intake for our ProPac products gives us reason to feel optimism for the second half of the year. At the same time, we have a short-term challenge in rising prices for fi ne paper, which we are now working to pass on to our customers."

January – March 2010

• Net sales of SEK 501 million (520)
• ProPac sales of SEK 76 million (60)
• Operating profi t of SEK 13 million (13)
• Profi t after tax of SEK 5 million (3)
• Cash fl ow after investments of SEK 13 million (41)
• Earnings per share: 0.32 (0.22)
• Acquisition of Tycon in Luxembourg
• The Board's dividend proposal 1 SEK per share (1)

Bong is a leading European provider of specialised packaging and envelope products and offers solutions for distribution and packaging of information, advertising materials and lightweight goods. Two important growth areas in the Group are the ProPac packaging concept and Russia. The Group has annual sales of approximately SEK 2 billion and some 1,200 employees in 12 countries. Bong has a strong market position, particularly in Northern Europe, and the Group sees attractive opportunities for further expansion and development. Bong is a public limited company and its shares are quoted on the NASDAQ OMX Nordic Stock Exchange Stockholm (Small Cap).

MARKET AND INDUSTRY

The European envelope market continued to stabilise in the fi rst quarter of 2010 and a higher level of activity was noted in several markets, particularly during March. For the fi rst quarter of 2010 the European Envelope Manufacturers Association (FEPE) reports a volume decrease of approximately 1% compared to 2009. The market for Direct Mail envelopes remained weak.

In Russia and Eastern Europe, a visible recovery was noted from the prior year's low levels. The assessment is that these markets have grown by 5-10% compared to the fi rst quarter of 2009.

The packaging market, in which Bong is active with its ProPac range, is signifi cantly larger and more multifaceted than the envelope market. Market statistics for the niches where Bong is active are unavailable or diffi cult to obtain. Bong's assessment is that demand for packages such as those used in e-commerce, mail order and the retail trade have been positively affected by the recent market upswing and these are expected to have strong growth potential over time.

SALES AND PROFITJANUARY – MARCH 2010

Consolidated sales for the fi rst quarter reached SEK 501 million (520). The weakening Euro rate had a negative impact on the Group's sales. Excluding foreign exchange effects, consolidated sales were up by 2.5% compared to 2009. On a like-for-like basis, sales excluding foreign exchange effects grew by approximately 2%, while ProPac sales measured in the same manner grew by 24%.

Order intake for ProPac, primarily gift bags for delivery in the second half of the year, was strong during the quarter.

Operating profi t was SEK 13 million (13). The new

exclusive Tyvek® agreement started to have a tangible effect on the Group's sales in the fi rst quarter and made a positive contribution to earnings. At the same time, profi t for the quarter was charged with costs of SEK -3 million for restructuring in the Nordic countries and Belgium. The Finnish harbour workers' strike in March also gave rise to extra costs of around SEK -1 million for Bong due to redistribution of paper between Group units. The change in fi nished product inventories affected profi t in an amount of around SEK 1 million (0). Net fi nancial items totalled SEK -7 million (-9), profi t before tax was SEK 6 million (4) and profi t after tax amounted to SEK 5 million (3).

HIGHER PAPER PRICES

Prices for uncoated fi ne paper, which is Bong's largest input material, are increasing. Due to the shortage situation that has arisen in the market, among other things following the earthquake in Chile and the Finnish harbour workers' strike in combination with a certain recovery in demand, all players in the paper market have raised their prices and thereafter announced additional price hikes.

It is normally possible for Bong to pass on price increases for paper, with a certain delay.

CASH FLOW AND CAPITAL EXPENDITURE

Cash fl ow after investing activities was SEK 13 million (41). Despite the build-up of inventories of Tyvek® products and higher volumes in a number of markets, working capital rose only marginally by SEK 2 million.

Investing activities during the fi rst quarter amounted to SEK 9 million, a fi gure that includes the acquisition of the wholly owned Tycon in Luxembourg and the associated company Image Envelopes in the UK.

FINANCIAL POSITION

Cash and cash equivalents at 31 March 2010 totalled SEK 120 million (SEK 74 million at 31 December 2009). Unutilised credits at 31 March 2010 amounted to SEK 228 million. Total available cash and cash equivalents thus amounted to SEK 348 million.

Consolidated equity at 31 March 2010 amounted to SEK 576 million (SEK 598 million at 31 December 2009). Translation of the net assets of foreign subsidiaries to Swedish kronor and changes in the fair value of derivative instruments reduced consolidated equity by SEK 27 million.

The interest-bearing net loan debt decreased during the period by SEK 29 million to SEK 560 million (SEK 589 million at 31 December 2009). Translation of net loans in foreign currency to Swedish kronor reduced the Group's net loan debt by SEK 16 million.

After a new credit procurement, the bank overdraft facilities in Nordea and SEB that were taken up in 2007 were replaced by a new credit agreement as of 31 March 2010. The new agreement with Nordea and Swedbank runs for three years.

EMPLOYEES

The average number of employees during the period was 1,220 (1,233). The number of employees at 31 March 2010 was 1,236 (1,223). Figures include the acquired Tycon, from 2010.

PARENT COMPANY

The activities of the Parent Company include administration of operating subsidiaries and Group management functions. Net sales are reported at SEK 0 million (0) and the period's profi t before tax was SEK 3 million (-26).

ACQUISITIONS

As announced in separate press releases, Bong has carried out two acquisitions in 2010:

Acquisition of Tycon in Luxembourg

As announced on 1 February 2010, Bong acquired Tycon's production unit in Luxembourg, as per the 1st March. The 100% acquisition of the company with 20 employees, is related to the exclusive licence agreement signed between Bong and Dupont in the autumn of 2009 for conversion of Tyvek® material into envelopes and packaging solutions. Tycon is specialised in this type of conversion. The acquisition made a positive contribution to Bong's earnings in the fi rst quarter.

Acquisition of Image Envelopes

As announced in a press release on 18 December 2009, Bong acquired 50% of the British specialist envelope manufacturer Image Envelopes Ltd at the beginning of January 2010. Bong has an option to increase its stake in the company over the next three years.

Image Envelopes delivers products to the British Direct Mail market and has an annual sales of over GBP 2.5 million. Image Envelopes is reported as an associated company in the Group.

SUBSEQUENT EVENTS

Acquisition of remaining shares in Voet In April 2010 Bong acquired an additional 12% of the shares in Netherlands-based Voet International Packaging Solutions V.O.F. Following the acquisition, the company is a wholly owned subsidiary.

OPPORTUNITIES AND RISKS

The risks arising in Bong's operations are related primarily to market development and different types of fi nancial risk. For further information, see Bong's annual report and website www.bongljungdahl.se.

ACCOUNTING POLICIES

This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, and the Swedish Annual Accounts Act. The applied accounting policies correspond to those used in the annual report for 2009 and should be read together with these. For a description of the new amendments, revisions, interpretations and standards effective for periods beginning on or after 1 January 2010, see Bong's annual report for 2009.

One of these changes is that the Group applies IFRS 3 (revised), "Business Combinations" as of 1 January 2010. Among other things, the revised standard states that all consideration paid to acquire an operation must be reported at fair value on the acquisition date, while subsequent contingent consideration is classifi ed as a liability which is then remeasured with recognition of changes in profi t or loss. All acquisition-related transaction costs are expensed. None of the new or changed standards and interpretations has had any signifi cant impact on the company's fi nancial statements.

Kristianstad, May 18, 2010 BONG LJUNGDAHL AB

Anders DavidssonPresident and CEO

This interim report has not been subject to special review by the company's independent auditors.

Presentation of the report

The interim report will be presented t a teleconference starting at 10:00 a.m. on 19 May 2010. The telephone number to the teleconference is +46 (0) 8 5052 0110. Pictures for the teleconference will be available on our website www.bongljungdahl.se by 8:00 a.m., at the latest.

For additional information contactAnders Davidsson, President and CEO of Bong Ljungdahl AB.

Telephone (switchboard) +46 (0)44 20 70 00, (direct) +46 (0)44 20 70 80, (mobile) +46 (0)70 545 70 80.

Financial calendar:

• Interim report January-June, August 25, 2010
• Interim report January-September, November 11, 2010
• Year-end report 2010, February 2011

INTERIM REPORT 31 MARCH 2010

CO NS OL IDA TED PR OF IT A ND	Jan - M ar	Jan - M ar	r/20 Ap 09-	Ja Dec n -
LO SS AC CO UN TS IN S UM MA RY	201 0	200 9	Ma r/20 10	200 9
(SE ) K M
Net les sa	501 .3	520 .1	1,8 95. 9	1,9 14.7
Cos t of ods ld go so	-39 5.2	-40 3.7	-1,5 02. 1	-1,5 10.6
Gro rofit ss p	106 .0	116 .4	393 .8	404 .1
Sel ling ex pen ses	-50 .4	-56 .6	-18 2.1	-18 8.4
Adm inis trat ive exp ens es	-41 .6	-45 .9	-15 1.9	-15 6.2
Oth atin g in nd er o per com e a exp ens es	-0.9	-0.7	5.5	5.7
Ope rati fit ng pro	13. 2	13. 1	65. 3	65. 3
Net fin ial i tem anc s	-6.7	-8.9	-32 .5	-34 .8
Pro fit b efo re t ax	6.5	4.2	32. 8	30. 5
Inco tax me	-1.8	-1.3	-6.8	-6.2
fit a fter Pro tax	4.7	2.9	26. 0	24. 3
Pro fit f or t he iod attr ibut able to ntro lling int sts per non -co ere	0.5	1.0	2.1	2.6
Bas ic e ings r sh , SE K arn pe are	0.3 2	0.2 2	1.7 4	1.6 5
, SE Dilu ted rnin sh K ea gs per are	0.3 2	0.2 2	1.7 3	1.6 3
Ave ber of sha , ba sic rag e n um res	13, 128 ,227	13, 128 ,227	13, 128 ,227	13, 128 ,227
Ave ber of sha , dil ute d rag e n um res	13, 230 ,227	13, 332 ,227	13, 230 ,227	13, 230 ,227

CO NS CE SH OL IDA TE D B AL AN EET	S			31 Dec
IN S ( SE ) UM MA RY K M		31- Ma r-20 10	31- Ma r-20 09	200 9
Ass ets
Inta ible set ng as s	1)	410 .2	433 .0	416 .2
Tan ible set g as s		522 .8	608 .9	550 .4
Fin ial a ts anc sse		92. 4	107 .2	95. 6
Inve ries nto		212 .9	257 .7	207 .8
Cu t re ceiv abl rren es		335 .3	357 .5	313 .9
Cas h a nd h e ival ent cas qu s		120 .0	119 .3	74. 3
Tot al a ts sse		1,6 93. 6	1,8 83. 7	58. 1,6 2
Equ ity and lia bili ties
Equ ity	2)	576 .0	627 .5	598 .1
Non t lia bilit ies -cu rren	3)	639 .9	755 .5	605 .1
Cu t lia bilit ies rren	4)	477 .7	500 .6	454 .9
Tot al e ity and lia bili ties qu		1,6 93. 6	1,8 83. 7	1,6 58. 2
1) Of wh ich odw ill , go		401 .5	430 .2	407 .9
2) Of wh ich roll ing inte ont ts , no n-c res		2.9	2.9	2.6
3) Of wh ich , int st-b ing ere ear		620 .1	726 .8	584 .5
4) Of wh ich , int st-b ing ere ear		59. 4	98. 1	78. 4

Jan - M ar	Jan - M ar	Ap r/20 09-	Ja Dec n - 200 9
4.7	2.9	26. 0	24. 3
-7.6	-18 .6	8.7	-2.3
23. 3	-10 .1	46. 5	13. 1
-43 .5	20. 6	-11 1.3	-47 .2
		5.6	5.6
0.9	3.7	-10 .4	-7.7
-26 .8	-4.4	-60 .9	-38 .5
-22 .1	-1.5	-34 .9	-14 .2
-21 .9	-2.8	-37 .8	-18 .7
-0.2	1.3	3.0	4.5
	201 0	200 9	Ma r/20 10

CH AN GE S I N C ON SO LID AT ED	Jan -M ar	Jan -M ar
EQ Y ( SE ) UIT K M	20 10	20 09
Op eni bal e fo r th erio d ng anc e p	59 8.1	62 9.0
To tal hen siv e in com pre com e	-22 .1	-1. 5
Clo sin ba lan for th eri od g ce e p	57 6.0	627 .5

CO NS OL IDA TED CA SH FL OW ST AT EM ENT S	Jan - M ar	Jan - M ar	Ap r/20 09-	Ja Dec n -
	201 0	200 9	Ma r/20 10	200 9
(SE K M )
Op ting tivi ties era ac
Ope rati fit ng pro	13. 2	13. 1	65. 3	65. 3
Dep iatio rtisa tion d im pai nt rec n, a mo an rme	20. 7	24. 3	86. 4	90. 1
Fina ncia l ite ms	-6.7	-8.9	-32 .5	-34 .8
Pai d ta x	-1.9	-1.3	-2.7	-2.1
Oth h ite er n on- cas ms	-1.6	-19 .5	-15 .2	-33 .1
Cas h flo w fr ting iviti act om op era es
bef ch in w ork ing ital ore ang es cap	23. 7	7.7	101 .3	85. 4
Cha s in rkin pita l nge wo g ca	-1.7	20. 7	75. 7	98. 1
Cas h fl fro atin ctiv itie ow m o per g a s	21. 9	28. 4	177 .0	183 .4
Cas h flo w fr inv ing iviti est act om es	-9.2	12. 9	-36 .7	-14 .6
Cas h fl aft er i stin ctiv itie ow nve g a s	12. 7	41. 3	140 .3	168 .9
Cas h flo w fr fin ing iviti act om anc es	35. 5	-22 .2	-13 4.6	-19 2.3
Cas h fl for riod the ow pe	48. 2	19. 1	5.7	-23 .4
Cas h a nd h e quiv ale nts at b egi nnin f pe riod cas g o	74. 3	99. 1	119 .3	99. 1
Exc han diff in h a nd h e quiv ale rate nt ge ere nce cas cas	-2.5	1.2	0.8	-1.4
Cas h a nd h e qui val ent at end of iod cas per	120 .1	119 .3	120 .1	74. 3

KE Y R AT IOS		J - D an ec 200 9	Jan - D ec 20 08
Op ting ofit % era pr ,		3.4	3.8
Pro fit m in, % arg		1.4	1.0
Re ity, % tur n o n e qu		3.5 7	1.8
Re ital loy ed % tur n o n c ap em p ,		5.5	5.6
Eq uity /as tio % set s ra ,		36 .1	33 .6
Ne t d ebt /eq uity tio tim ra es ,		0.9 8	1.1 8
bt/ Ne t lo de EB ITD A an		3.7 9	4.4 0
Ca ital loy ed SE K M p em p ,		1, 26 1.6	1, 472 .7
Inte t-b ring t lo de bt, SE K M res ea ne an		58 9.2	74 4.7
R S DA TA PE HA RE		J - D an ec	Jan - D ec
		200 9	20 08
Ba sic rnin r sh SE K ea gs pe are		1.6 5	0.8 0
, Dil d e ing sha SE K ute arn s p er re,	1)	1.6 3	0.7 8
Eq uity r sh be for e d ilut ion SE K pe are ,		45 .56	47 .91
Dil d e ity r sh SE K ute qu pe are ,		45 .77	48 .22
Ba sic mb of s har ndi nd of riod out sta at e nu er es ng pe		13 128 227	13 128 227
		, ,	, ,

13 , ,	128 227 , ,
13 230 227 13 , ,	332 227 , ,
13 128 227 13 , ,	128 227 , ,
13 230 227 13 , ,	332 227 , ,
	128 227 13

1) The dilution effect is not taken into account when it leads to a better result.

FINANCIAL OVERVIEW

Ke atio y r s
	200 9	200 8	200 7	200 6	200 5
Ne les SE K M t sa ,	1, 915	1, 937	1, 991	1, 985	1,7 82
Op ting ofit SE K M era pr ,	65	74	60	40	71	1)
Pro fit b efo SE K M re t ax,	24	10	16	-1	23	1)
Ca sh flow aft inv est ing tivi ties er ac	165	144	1	-7	105
Op ting in, % era ma rg	3.4	3.8	3.0	2.0	4.0	1)
Pro fit m in, % arg	1.4	1.0	0.6	0.1	1.9	1)
Ca ital rat e tu , t ime p rno ver s	1.1	1.1	1.1	1.2	1.1
Re tur ity, % n o n e qu	3.6	1.8	2.8	neg	4.3	1)
Re ital loy ed, tur % n o n c ap em p	5.5	5.6	4.9	3.1	5.3	1)
Eq uity /as tio, set % s ra	36	34	33	31	34
Ne t lo deb SE K M t, an	589	745	829	807	706
Ge arin tio, tim g ra es	0.9 8	1.1 8	1.4 5	1.5 0	1.2 6
Ne t lo deb t/E BIT DA ime , t an s	3.8	4.4	5.4	5.7	4.1	1)
EB ITD A/n et f ina nci al i ime tem s, t s	4.5	3.1	3.2	3.8	4.6	1)
Av ber of loy era ge num em p ees	1, 220	1, 270	1, 346	1, 379	1, 280
Da ta sh per are
of Nu mb sha er res
Bas ic n ber of sha ndi nd of p erio d tsta at e um res ou ng	13 128 227 , ,	13 128 227 , ,	13 128 227 , ,	13 017 298 , ,	13 004 986 , ,
Dilu ted mb f sh din d o f pe riod uts tan t en nu er o are s o g a	13 230 227 , ,	13 332 227 , ,	13 428 227 , ,	13 651 180 , ,	13 651 180 , ,
Av bas ic n ber of sha era ge um res	13, 128 227 ,	13 128 227 , ,	13 079 425 , ,	13 006 000 , ,	13 004 986 , ,
Av dilu ted mb f sh era ge nu er o are s	13, 230 227 ,	13 332 227 , ,	13 379 425 , ,	13 651 180 , ,	13 11, 180 ,5
Ea rni har ngs pe r s e
Bas ic, SE K	1.6 5	0.8 0	1.1 9	-0. 04	1.7 9
SE Dilu ted K ,	1.6 3	0.7 8	1.1 7	-0. 04	1.7 4
uity Eq har pe r s e
Bas ic, SE K	45 .56	47 .91	43 .54	41 .31	43 .17
Dilu ted SE K ,	45 .77	48 .22	43 .98	42 .30	44 .09
Oth dat sha er a p er re
Div ide nd, SE K ( Boa rd p l fo r 20 09) rop osa		1.0 0	1.0 0	1.0 0	0.0 0
Qu d m ark rice the ba lan she et d SE K ate et p ate on ce ,	21	12	42	68	64
P/E tio, tim -ra es	13	15	36	neg	37
Pric e/b ook lue be for e d ilut ion % va ,	46	25	96	165	148
e/b Pric ook lue aft er d ilut ion % va ,	46	25	96	160	145

1) Excluding effect of settlement in a legal dispute

Pro fit be for e t ax	6. 5	20 .4	0.0	5.8	4.2	4.7	-2. 3	2.0	15 .7	14 .8	1.7	-16 .7
Ne t fi ial ite na nc ms	-6. 7	-10 .2	-8. 1	-7. 6	-8. 9	-15 .4	-12 .3	-14 .7	-11 .8	-10 .2	-14 .6	-11 .5
Op tin fit era g p ro	13 .2	30 .7	8.1	13 .4	13 .1	20 .1	10 .0	16 .7	27 .5	25 .0	16 .3	-5. 2
Op tin era g ex p en se s	-48 8.1	-48 2.2	-41 6.4	-44 3.9	-50 7.0	-48 7.8	-43 0.7	-44 6.3	-49 8.0	-49 2.6	-44 4.7	-47 7.6
Ne ale t s s	50 1.3	51 2.9	42 4.5	45 7.3	52 0.1	50 7.8	44 0.7	46 3.0	52 5.5	51 7.6	46 1.0	47 2.4
Q U AR TE RL Y D AT A P ( S ) G RO U EK M	/20 1 10	/20 4 09	/20 3 09	/20 2 09	/20 1 09	/20 4 08	/20 3 08	/20 2 08	/20 1 08	/20 4 07	/20 3 07	/20 2 07

P A R E N T C O M P A N Y P R O F I T A N D	Ja Ma n - r	Ja Ma n - r	P A R E N T C O M P A N Y B A L A N C E	Ma r-3 1	De 3 1 c-
L O S S A C C O U N T S I N S U M M A R Y ( S E K M )	20 10	20 0 9	S H E E T S I N S U M M A R Y ( S E K M )	20 10	20 0 9
Ne les t s a	0. 0	0. 0	As ts se
Co f g st ds l d o oo so	0. 0	0. 0	Ta i b le ts ng as se	6. 6	5. 1
Gr f it os s p ro	0. 0	0. 0	F ina ia l a ets nc ss	1, 14 1.5	1, 22 0. 1
			Cu iva b les nt rre rec e	10 9. 9	10 9. 1
A dm in ist ive rat ex p en se s	.8 -7	-8 .6	Ca h a d c h e iva len ts s n as q u	40 .3	6. 1
Ot he ing inc d e t r o p era om e a n xp en se s	3. 1	1.2	To l a ta ets ss	1, 2 9 8. 3	1, 3 4 0. 4
Op f t ing it era p ro	-4 .7	-7 .4
			Eq ity d l ia b i l it ies u an
Ne f ina ia l ite t nc ms	8. 3	-22 .0	Eq ity u	5 8 4.6	5 8 0. 2
Pro f it be for iat ion d t e a p p rop r s a n ax	3. 6	-29 .4	Un d r tax e es erv es	0. 0	0. 0
			Pro is ion v s	11 .7	11 .7
Inc e t om ax	-0 .9	-	No t l ia b i l it ies n-c urr en	5 0 2.0	45 9. 2
Pr f it a fte r ta o x	2.7	2 9. 4 -	Cu l ia b i l it ies nt rre	20 0. 0	28 9. 3

Ja Ma n - r	Ja Ma n - r	P A R E N T C M P A N Y B A L A N C E O	Ma r-3 1	De 3 1 c-
		As ts se
		Cu nt iva b les rre rec e	10 9. 9	10 9. 1
		Eq ity d l ia b i l it ies an u
		Pro is ion v s	11 .7	11 .7
		Cu l ia b i l it ies nt rre	20 0. 0	28 9. 3
		ity ia i it ies To ta l e d l b l q u an	1, 2 9 8. 3	1, 3 4 0. 4